Step Therapy Law: Does It Affect Medicare?

Step therapy, also known as step protocol or fail-first requirements, is a cost-saving strategy that requires patients to try a lower-cost prescription drug before moving on to a more expensive one. While this practice is common, it is considered questionable as it can cause significant delays in treatment and potentially irreversible disease progression. In 2019, Wisconsin passed a law requiring patient protections for step therapy protocols in state-regulated, individual insurance plans. This law was praised by the National Psoriasis Foundation and other advocacy organizations as it ensures that patients receive the treatment that their healthcare provider knows is right for them. It is unclear from the sources whether the Wisc step therapy law applies to Medicare. However, it is worth noting that Medicare Advantage plans have the option of applying step therapy for Part B drugs, which can lower costs and improve the quality of care for Medicare beneficiaries.

Step therapy and prior authorization

In the context of Medicare, prior authorization refers to the process where a doctor or prescriber must first demonstrate that a particular medication is medically necessary for the patient and meets the prior authorization requirements before Medicare will cover it. Step therapy, in the context of Medicare, means that patients must first try a less expensive medication on the Medicare Prescription Drug Plan's formulary (drug list) that has been proven effective for most people with their condition before they can move on to a more expensive prescription drug. This might involve trying a generic drug before a brand-name medication.

The process of prior authorization and step therapy can create significant barriers for physicians to deliver timely, evidence-based patient care, and it can delay the start or continuation of necessary treatment. However, the goal of these practices is to ensure that patients receive the most effective and cost-efficient medication available and to promote better clinical decisions.

In the state of Wisconsin, a new law was passed that requires patient protections for step therapy protocols in state-regulated, individual insurance plans. This law ensures that when an insurer, pharmacy benefit manager, or utilization review organization establishes a step therapy protocol, it must be based on clinical practice guidelines, and there must be a clear and expeditious exceptions request process in place.

Step therapy and patient protections

Step therapy is a type of prior authorization for drugs that starts a patient's treatment with the most preferred drug therapy and only progresses to other therapies if necessary. This approach is used to promote better clinical decisions and lower costs. However, it is important to ensure that patient protections are in place when implementing step therapy protocols. Here are some key considerations for patient protections:

Clinical Practice Guidelines

Step therapy protocols should be based on clinical practice guidelines developed by independent experts. This ensures that the patient's interests are prioritized and they receive the treatment that their healthcare provider knows is right for them.

Exceptions Process

A clear and accessible exceptions process should be established to allow providers and patients to challenge the use of step therapy. Patients should be granted an exception if treatments may cause adverse reactions or harm, are expected to be ineffective, or if the patient is already receiving a positive outcome with their current treatment.

Timeline for Decisions

A clear and expedited timeline should be set for both emergency and non-emergency situations to ensure patients do not experience delays in treatment. This includes timely responses to exception requests and appeals.

Exemptions from Step Therapy

There should be a basic framework to determine when it is most appropriate to exempt patients from step therapy. For example, if the required treatments are contraindicated, will likely cause harm, or are expected to be ineffective.

Patient Safety and Quality of Care

Step therapy should be implemented with a focus on patient safety and improving the quality of care. This includes considering the potential for adverse reactions, ineffective treatments, and unnecessary delays in receiving effective treatment.

Administrative Burdens

The administrative burdens introduced by step therapy can hinder access to necessary care. Efforts should be made to minimize these burdens, such as simplifying the process for obtaining medical records and streamlining the appeals process.

Patient Education and Communication

Patients should have access to clear and understandable information about step therapy protocols, their treatment options, and the process for requesting exceptions or appeals.

Monitoring and Evaluation

The impact of step therapy on patient outcomes and healthcare costs should be closely monitored and evaluated. This includes tracking the number of requests, approvals, denials, and appeals, as well as the impact on treatment discontinuation and medical resource use.

Step therapy and cost-effectiveness

Step therapy is a type of prior authorization for drugs that promotes better clinical decisions and better deals for patients. It involves beginning medication for a medical condition with the most preferred or cost-effective drug therapy and only progressing to other, more expensive therapies if necessary. Step therapy is used by all major private insurers and Medicare Advantage plans in the US, and is aimed at curbing expenditures on expensive drugs.

Step therapy is beneficial for insurers as it gives them leverage to negotiate lower prescription drug costs. However, it can be burdensome for patients as it requires them to try a less expensive alternative treatment first, only allowing access to more expensive treatments if the cheaper option is ineffective. This can cause treatment discontinuity and increased medical utilization, which may outweigh the cost savings of step therapy.

A study by James D. Chambers et al. found that step therapy is typically used for specialty pharmaceuticals and/or high-cost drugs prescribed for chronic or life-threatening conditions. It is also more commonly used for certain conditions, with step edits being the most common restriction to limit specialty drug coverage, used in nearly 75% of decisions.

The use of step therapy has also been studied for patients with rheumatoid and psoriatic arthritis. The study found that patients whose insurers implemented step therapy had lower odds of treatment effectiveness and medication adherence compared to patients with the same disease without similar access restrictions. This demonstrates the potential negative impact step therapy can have on patients and the importance of using it judiciously rather than as a blanket mechanism.

In summary, while step therapy can be an effective tool for insurers to control costs and promote the use of cost-effective treatments, it may also have negative consequences for patients in terms of treatment effectiveness and adherence. More empirical evidence is needed to fully understand the impact of step therapy on health outcomes and to optimize its implementation.

Step therapy and Medicare Advantage plans

Step therapy is a type of prior authorization for drugs that starts medication for a medical condition with the most preferred or cost-effective drug therapy and only progresses to other, more expensive therapies if necessary. This strategy is often used to control costs and ensure patients receive the right treatment at the right time.

In 2018, the Centers for Medicare & Medicaid Services (CMS) announced that Medicare Advantage plans would have the option of applying step therapy for physician-administered and other Part B drugs. This change was implemented to lower costs and improve the quality of care for Medicare beneficiaries.

Under this new policy, Medicare Advantage plans can manage Part B drugs by implementing step therapy, beginning with cost-effective medications and progressing to more expensive alternatives if the initial treatment is ineffective. This approach ensures that patients receive clinically appropriate treatment while also reducing costs for both the patients and the plans.

The new step therapy requirements do not apply to patients who are already receiving Part B drug therapies. For new prescriptions, patients can request an exception from their Medicare Advantage plan if they believe they need direct access to a specific drug. These requests are generally completed within 72 hours, depending on the patient's health condition.

The adoption of step therapy in Medicare Advantage plans is expected to improve care coordination and drug adherence, resulting in better outcomes for Medicare beneficiaries.

Step therapy and prescription drug coverage

Step therapy is a type of prior authorization for drugs that starts treatment for a medical condition with the most preferred or cost-effective drug therapy and only progresses to other, more expensive therapies if necessary. It is a common cost-control strategy that generally saves money for both the patient and the health plan.

In the context of prescription drug coverage, step therapy means that a patient may be required to try a lower-cost prescription drug that treats a given condition before "stepping up" to a similar but more expensive drug. The health plan will not cover the more expensive drug until the lower-cost medication has failed to treat the patient's condition. This practice is also known as "step protocol" or "fail-first requirements".

In the United States, step therapy is regulated at both the state and federal levels. At the state level, individual states have enacted legislation to protect patients and provide guardrails for step therapy protocols in insurance plans. For example, Wisconsin passed legislation that requires patient protections for step therapy protocols in state-regulated, individual insurance plans. This law ensures that when an insurer, pharmacy benefit manager, or utilization review organization establishes a step therapy protocol, it must be based on clinical practice guidelines.

Additionally, patients must have clear and expeditious access to the exceptions request process when a plan restricts prescription drug coverage. Insurers are required to respond within one business day for emergency exception requests and within three business days for non-emergency requests. Patients will be granted an exception if the prescribed treatment is likely to cause harm, is expected to be ineffective, has already been tried and discontinued due to lack of efficacy, or if the patient is receiving positive outcomes with their current treatment.

At the federal level, employer plans are regulated by the Department of Labor, and self-insured employer plans are outside the scope of state laws. The Safe Step Act, first introduced in 2017, aims to amend the Employee Retirement Income Security Act (ERISA) to require group health plans to provide a step therapy exception process.

Medicare Advantage plans in the United States have also implemented step therapy for Part B drugs, allowing them to negotiate better deals and lower drug costs for patients. Medicare beneficiaries can request an exception if they believe they need direct access to a drug that would otherwise only be available after trying an alternative. MA plans must also ensure that new step therapy requirements do not disrupt ongoing Part B drug therapies, and beneficiaries have the opportunity to choose a Medicare Advantage plan that includes step therapy during the annual Medicare Open Enrollment period.

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